Expat numbers down as downturn bites

The recent crisis has pushed upward of 30% of expats working in Russia back to their respective countries. Their numbers are on the decline - and many are choosing not come to Russia.

Russia for foreigners has always been a country of perceived risk – but it has always been a risk with potentially huge rewards. Big salaries and low taxation have been a draw for many.

In addition, Russia is a relatively undiscovered country for people in the West and offers a sense of adventure. Although, Luc Jones, Partner at Antal Russia says that sense of strangeness works both ways.

“In Russia there is very much the concept of expat and local we are now seeing in central and eastern Europe much less of this. Because, if an American works in the UK or a German works in Italy – this isn’t an expat – this is just somebody working in a different country and I think eventually that will happen here.”

The recent crisis spelt the end for many expats working in Russia as local companies cut costs by letting go high paid staff. With the recovery has come renewed demand for outside expertise and the ability to pay for it.

But head hunters caution against the idea that foreign is necessarily better.

“On the whole, I am a little bit skeptical about how successful foreigners have been when working for Russian companies, because far too often they are brought in for window dressing purposes, you know, ‘Hey, we’ve got this guy, let’s wheel him out for the investors because he’s got a big name’ “

Clearly it’s a question of hiring the best person for the job. But Russia presents its own set of challenges for business, where George Abdushelishvili, Senior Partner at Ward Howell local knowledge is often of paramount importance.

“The vast majority of expatriates are not great as general managers, as CEOs of corporations, not because they are bad, but because the state dominates. GR (government relations) as a function is vital here, so you shouldn’t hire expatriates for this difficult role. As first deputy, heading up marketing, heading up operations – Russians cannot concentrate on details, expatriates can and in those businesses where competition is high and margins are low, expatriates are great.”

Russia isn't such a unique and unknown place and many approaches to conducting business are familiar. The key to its appeal is that there is still so much to do and accomplish – something that foreigners from a saturated and developed West sense – and want to be a part of.